US CMBS delinquency rate declines resume in July

After a disconcerting June and a ‘whiff of volatility,’ the US CMBS delinquency rate has resumed its descent, according to the latest report from data and research firm Trepp.

After a disconcerting June and a ‘whiff of volatility,’ the US CMBS delinquency rate has resumed its descent, according to the latest report from data and research firm Trepp.

The rate is now 62 basis points lower than the year-ago level and 33 basis points lower year-to-date.

After a 17 basis point (bps) drop to 5.40% in May, the biggest since November 2014, the rate rose by five bps in June to 5.45%. Now the CMBS inched down three basis points in July to 5.42%.

In July, $1.4bn in loans became newly delinquent, which put 27 basis points of upward pressure on the delinquency rate, but about $600m in cured loans pushed delinquencies down 12bps.

CMBS loans that were previously delinquent but paid off either at par or with a loss totaled over $800m, pushing the rate down by an additional 15bps.

The delinquency rate for lodging, the best performing major property type, improved by five basis points to 3.70%. The industrial delinquency rate, which had experienced the greatest month-over-month drop in June, declining 38 bps to 7.12%,  increased 29 basis points to 7.41%.

The delinquency rate for multifamily properties, the worst performing among the major property types, moved up three basis points to 8.76%.

 

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